Woolworths, Our Price, Zavvi HMV and now Blockbuster. Or, as Queen might say, “Another one bites the dust”.
Of course, the recession hasn’t helped and HMV was crippled by a debt mountain of around £220m plus a multi-million pound rent bill (Are landlords too greedy? That’s a debate for another day.) but it can’t be denied that many of these retailers have also been badly hit by the effect of internet shopping. Let’s face it, Christmas Day was apparently a record for online sales with estimates of around £200m being spent; Boxing Day even bigger at £475m give or take. The stats also show that huge numbers of Christmas presents were purchased online (again) and, let’s face it, it’s hard to argue with some of the internet prices that are available because those e-tailers don’t have shop overheads.
So are we all now so sucked in to the internet that we’ve forgotten the simple pleasures of shopping?
Yes, I am a bloke – and no, I don’t mean traipsing round hundreds of clothes shops with my wife only to return to the first one (sorry, dear). I mean the simple pleasure of whiling away an hour or so in a record shop, preferably filled with vinyl although CDs will do. I have a collection of vinyl LPs and CDs going back to the ‘60s and there’s quite a bit I wouldn’t have bought if I hadn’t been in the store, going through the records.
It’s not just records clearly. Blockbuster shows that the DVD market is also struggling and, in fairness, I haven’t rented a DVD for a long time. If you can buy a DVD for under £5 in Sainsbury’s, why would you pay £3.50 to rent it?
Yet I read that 75% of music is purchased in hard form on CD, i.e. it is not downloaded. I also read that the film and music industry recognise the importance of high street outlets to promote new products and to benefit from impulse buys yet this seems contradictory to reality.
Independent camera retailers are another group that seem few and far between and I’ve struggled to find independent hi-fi retailers unless you want to spend thousands at the high end of the market (although I have finally ventured into a Richer Sounds store and been impressed by their customer service).
So who will succumb next to the power of the internet? No-one is safe. Solicitors have already experienced the power of the internet and the power of big corporations (to the extent that they now generically refer to ‘Tesco Law’) as a result of de-regulation and if you think face-to-face advice in financial services is sacrosanct, take a look at www.nutmeg.com
The end is not nigh but firms providing face to face advice to clients had better wake up and smell the coffee. Technology is changing our world as much as any other – and not necessarily for the better. Adapt, survive and grow or potentially face difficulties as the power of the internet replaces traditional ways of doing business. No, online business won’t be right for every client, but in the more competitive post-RDR environment with too many people chasing too few HNW clients, the market amongst the ‘disenfranchised’ (estimated at 5m by Deloitte in their survey last year) may well drift towards the ‘net – and once they’re there, they may be hard to claw back.